Local MP John Healey says any plans to form an NHS subsidiary company at Rotherham Hospital should be halted following guidance from NHS Improvement.

The national regulator ordered a temporary stop to the introduction of new NHS Subsidiary Companies which have threatened thousands of NHS jobs.

The Rotherham NHS Foundation Trust was recently in discussions about setting up a subsidiary company, meaning supporting roles could have been outsourced, in a bid to cut costs.

John said:

“The Rotherham hospital board must now set aside any plans it has for setting up an NHS subsidiary company. Since the idea was first floated, I’ve voiced my concerns directly with the chairman and chief executive. It would create a two-tier workforce and smacks of a dodge to avoid paying VAT. So I welcome the NHS nationally calling a halt on these local hospital companies.

“Labour has repeatedly warned that thousands of NHS staff would in effect see their jobs privatised, with their national pay and conditions put at risk.

“It’s a sign of just how stretched NHS finances have become that hospitals are reaching for ever more complicated schemes to try to save money.”

The Labour Party has written to the Government demanding that it blocks the creation of wholly owned subsidiary companies and undertakes a full review of the guidance on the relevant tax requirements of NHS trusts and foundation trusts.